DCC to meet to decide telecom spectrum auction base prices

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SME Times News Bureau | 19 Sep, 2019
The Digital Communications Commission will meet on Thursday and is likely to finalise the prices for the upcoming spectrum auction, according to official sources here, who also said that in this regard the DCC is expected to adhere to the auction base price recommended by telecom regulator Trai.

An inter-ministerial body, the DCC is the highest decision-making body of the Department of Telecommunications (DoT) and has powers to make changes. A DoT internal panel has agreed to the Trai-recommended spectrum prices.

Even after being referred by the Telecom Ministry, the Telecom Regulatory Authority of India (Trai) stuck to its recommendations on the reserve price for spectrum, including for the 5G band.

In June, following industry expressing concerns over what it called the exorbitant and uncompetitive pricing of spectrum, the DCC had decided to ask Trai to reconsider its recommendations to ensure competition and greater participation of a larger set of players in auctions slated for 2019.

The sources said the inter-ministerial panel will discuss and is likely to approve the spectrum prices, before the Notice Inviting Applications (NIAs) are drafted and, thereafter, cabinet approval is taken for the auction.

Trai had, in August 2018, recommended auction of about 8,644 MHz of spectrum across bands at an estimated total base price of Rs 4.9 lakh crore, but the financially-stressed telcos opposed it, saying the proposed prices were unaffordable and exorbitant.

Last year, Trai had proposed the sale of 20 MHz blocks of 5G spectrum in the 3,300-3,600 MHz band at a price of Rs 492 crore per unit. By this price, an operator would be required to pay at least Rs 9,840 crore to buy 5G spectrum on a pan-India basis as the regulator has suggested it should be put to auction in a block size of 20 MHz.

For the 700 MHz band, though Trai had suggested a 43 per cent cut to Rs 6,568 crore per unit as the spectrum went unsold in 2016 due to high reserve prices, operators would still have to shell out Rs 32,840 crore for a pan-India 5 MHz block.

Going by global standards, the price of Rs 492 crore per MHz for 5G spectrum was seen on the higher side.

The 5G ecosystem in India has not developed sufficiently as yet, and operators winning spectrum would have to wait for some more time before being able to deliver services effectively.